The United States Court of Appeals for the Second Circuit has issued a decision in Gibbons v. Bristol-Myers Squibb Co., affirming a series of multi-district litigation (MDL) court orders on federal preemption grounds and rejecting plaintiffs’ jurisdictional arguments.
The orders, issued between 2016 and 2018, involved Bristol-Myers Squibb and Pfizer’s anticoagulant medication Eliquis. In the orders, the MDL court dismissed all of plaintiffs' complaints on federal preemption and adequacy of warnings grounds, prior to the parties conducting any discovery. Some of the plaintiffs appealed.
The decision effectively terminates the litigation and creates strong precedent in the Second Circuit on both pre-service ("snap") removal and on federal preemption of state law failure-to-warn claims. DLA Piper represented Bristol-Myers Squibb and Pfizer in the litigation.
In the decision, the Second Circuit first addressed plaintiffs' argument that the MDL court incorrectly denied motions to remand certain cases filed in state court in Delaware (where both defendants were incorporated), which BMS and Pfizer removed prior to service of process. While the Second Circuit noted that district courts within the Second Circuit were split on the appropriateness of pre-service removal by a forum defendant, the Second Circuit concluded that the plain language of the removal statute makes clear that the home-state defendant exception applies only after a forum defendant is properly joined and served. See slip op. at 10-11.
The Second Circuit rejected plaintiffs' arguments that the literal meaning of the statute was absurd or fundamentally unfair. See id. at 11-15. Thus, prior to service, a forum defendant in the Second Circuit can remove a case to federal court, provided all other diversity requirements are met. In so holding, the Second Circuit joins the Third Circuit, which reached a similar conclusion last year.See Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147 (3d Cir. 2018).
The court next turned to plaintiffs' argument that the MDL court erred in finding that their state law failure-to-warn claims were preempted by the Food, Drug, and Cosmetics Act (FDCA). Rejecting the argument, the court explained that, in order to state a failure-to-warn claim that is not per se preempted by the FDCA, a plaintiff must plead "a labeling deficiency that [efendants] could have corrected using the CBE regulation." Slip op. at 18 (quoting In re Celexa & Lexapro Mktg. & Sales Practices Litig. , 779 F.3d 34, 40–41 (1st Cir.2015)).
Specifically, a plaintiff must identify "newly acquired information" that "reveals risks of a different type or greater severity or frequency than previously included in submissions to the FDA," as required under the CBE regulation. 21 C.F.R. §§ 314.70(c)(6)(iii), 21 C.F.R. 314(b). Only if a plaintiff makes such a showing does the burden shift to the defendants to demonstrate that there is "clear evidence" that FDA would not have approved the relevant labeling change. See slip op. at 18. Applying this standard to the Eliquis cases, the Second Circuit concluded that the MDL court properly dismissed plaintiffs' failure-to-warn claims on the pleadings. See id. at 19. As the court explained, despite repeated attempts, plaintiffs had failed to allege the existence of any "newly acquired information" that would have allowed the defendants to make any relevant changes to the Eliquis labeling.See id.at 20-21.
The Second Circuit's ruling significantly strengthens preemption law in two respects.First, the decision confirms that, in appropriate circumstances, preemption can be resolved on motion to dismiss, and that plaintiffs must allege specific newly acquired information that would have warranted a label change using the CBE regulation. Second, it appears to be the first decision by a US Court of Appeal finding preemption where the alleged safety information at issue involved a branded medication (unlike the Seventh Circuit's decision in Dolin v. GlaxoSmithKline LLC, 901 F.3d 803 (2018)) and arose after FDA's approval (unlike the First Circuit's decision in Celexa).
Please let us know if you would like to discuss this ground-breaking preemption decision with DLA Piper's Eliquis team, which was led by Loren Brown, Cara Edwards and Lucas Przymusinski (New York), Matt Holian and Katie Insogna (Boston), Ilana Eisenstein (Philadelphia), Brooke Kim and Allexanderia Bingham(San Diego) and Paul Schmitt (Washington, DC). DLA Piper collaborated with Hogan Lovells on the appeal. For your reference, see the decision here.